Connect with us

EEGReport-Magazine-Issue3

Interview with Johan Styren, CEO of LeoVegas Gaming Ltd – (EEGReport – Magazine – Issue3 – June – September 2016)

Published

on

EEGReport Magazine: The LeoVegas brand has grown a lot since its launch and I guess after winning all the top awards, it would seem there is no other step a company can do to bring more success, yet you guys have made another huge leap. Which were the factors that propelled LeoVegas owners to list LeoVegas AB on the Nasdaq First North Premier?

maxresdefault

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

 The main objectives to get listed on the Nasdaq First North Premier was to facilitate the company’s continued growth strategy by broadening the company’s shareholder base and providing LeoVegas with access to the Swedish and international capital markets. We’re proud that the interest in the LeoVegas shares was so strong that the offering was significantly over-subscribed. In fact, through our IPO our shareholder base grew by 30,000 new shareholders. We see the listing as a platform for further growth.

EEGReport Magazine: Will the generated capital help LeoVegas pursue an even larger portion of the market?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

We see the IPO as a platform for growth and that will allow us to explore various possibilities of entering new strategic markets. Even before the IPO we had a strong balance sheet, it is even stronger now but the capital that was raised in conjunction with the IPO wasn´t a must to deliver on your growth strategy.

  Starting operating in a new market is not a simple process – it is a thorough undertaking made up of multiple processes. You obviously need to start off with a detailed market research to see if the market is viable or not for your offering and once you have all your data and forecasts in hand, you then need to decide whether as a company you should explore it further or not. This, of course, also involves analyzing the regulations of the market and whether your current practices fully comply with the market and its legal requirements.

 We believe that being mobile-first really gives us that competitive edge over larger and perhaps more established operators. Mobile usage in certain markets is increasing exponentially and we will definitely be looking at the various possibilities that such a development has to offer.

EEGReport Magazine: Since mobile gaming has evolved and keep evolving yearly, what are you guys planning in the next few years in terms of accessibility or entering new markets?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

The mobile gaming sector is evolving constantly. LeoVegas had the foresight of investing in a mobile-first platform even before there was a marked shift in people’s behavioral patterns.

 

The mobile-first mantra has been practiced in everything that LeoVegas has embarked on so far, and we plan on keeping it as our foremost guiding principal for all our future endeavors. Of course, being mobile-first comes with its own set of challenges. As said, the sector is constantly evolving and to continue offering the best experience out there, we need to always be one step ahead.

 

Therefore, we are constantly updating our platform according to new features and possibilities that updates in mobile devices and/or operating systems have to offer. With the latest iOS update, for example, we exploited the 3D Touch feature that was introduced. We incorporated 3D Touch technology using pressure sensors to provide Peek and Pop access to the latest played and top featured games straight from the iPhone home screen without the need to launch the LeoVegas app. This feature is currently only available on the iPhone6s but it will be commonly used in the future.

 

Being in this market always means that we need to be ahead of the game with regards to new products. Hence,m even before the launch of Apple Watch, we were already looking at how we can develop further our offerings specifically for wearables.

EEGReport Magazine: According to recent figures the total sum wagered on mobile casino games is expected to continue growing in the upcoming years. Do you think that mobile gambling shall become a true factor for which online gambling markets open their doors for online gambling? I’m referring to countries where mobile users are in large crowds and use apps to play free games and the government isn’t issuing licenses for online gambling operators.

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

I fully agree that the use of smartphones and tablets is definitely increasing. Whereas a few years back, mobile devices were a commodity, they are today considered as a necessity. I would go a step further and say that nowadays we’re witnessing the phenomenon of multiple devices where people use their smartphone and tablet, sometimes at the same time!

 I think that the big operators have already realized the importance of mobile gaming. What we keep finding is that rather than going mobile first, practically all companies opt for a desktop-first approach and then try to adapt their product for mobile. The results are that many a times you feel like you’re looking at a squashed desktop site. I’m not talking about aesthetical issues – there are some quick fixes for that in terms of UX. The actual problems start to arise when it comes to speed, data usage, loading times, etc., which are very specific to mobile devices – issues that are not given too much importance when developing for desktops. Amongst other issues, we find that our competitors’ mobile apps require longer loading and transactional times than our mobile-first product.

 

Therefore, what we might see in the future is that the online companies may scrap their mobile offering completely and restart from scratch by going mobile-first – something that LeoVegas has been doing for the past 4+ years, during which we have really learnt a lot and now pride ourselves as being one of the top professionals in this aspect.

 With regards to licenses, our reasoning is that to gain and maintain trust you need to operate wholly within the boundaries of the law and thus need to comply, and even surpass, the requirements imposed by the different markets and/or license regulations.

EEGReport Magazine: Given the dynamic technology developments and the dramatic shift toward mobile use in the past few years, it’s safe to say that mobile gambling market will grow at a faster pace than ever. Do you agree with this?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

I agree that the use of mobile is increasing significantly year on year. As I mentioned earlier, in the last years we’ve seen a shift in behavioral patterns where it comes to how we use our mobile devices. Whereas in the past we used to use them for communication purposes, we now use them primarily for entertainment reasons. People love playing games on their mobiles and if they have the possibility of winning real money, the thrill becomes even bigger.

 We are also seeing the decrease of mobile data costs so people are online even when they are not within a free Wi-Fi zone. The European Union will soon abolish roaming charges, meaning that people will be able to continue using their mobile phones in the same way, even whilst they are in another country without the fear of ramping up a big mobile data bill.

 

All of this will encourage more people to seek the thrills that a mobile gaming platform can offer them.

 To answer with some numbers the online gaming market is expected to grow 9% CAGR coming years compared to the mobile segment, the equivalent figure is 24% according to H2 Gambling capital.

EEGReport Magazine: One of the planets largest wireless carrier will begin field trials on so-called fifth-generation, or 5G, technology this year and “some level of commercial deployment” is expected to begin by 2017. That’s earlier than the 2020 timeframe that many in the industry have pegged for the initial adoption of 5G technology. Just as the move to today’s 4G wireless technology drove an explosion of smartphone adoption and mobile services, 5G could similarly drive its own tech revolution. Should online gambling operators take advantage of the golden opportunity hidden in the recent mobile connectivity explosion?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

These are really exciting times in terms of technology. New advancements in telephony, such as 5G, will of course revolutionize the way we think about the whole mobile device concept. With the shift from 3G to 4G we’ve witnessed a large increase in streaming services. Whether it’s Spotify or YouTube, people are using such services more and more as their bandwidth allows them to do so without any buffering issues that we all struggled with in the past. The adoption of 5G will continue boosting these as well as open a lot of new possibilities and opportunities for mobile gaming companies.

 5G will also open the door for an unlimited amount of connected things and people and therefore concepts such as internet of things, smart cities, connected cars, etc can truly flourish.

Companies in the gaming industry should get on the bandwagon of this revolution and be at the forefront of how they can utilize this new phase of mobile telecommunications standards and the speeds that it can offer.

EEGReport Magazine: In regards to European markets, what are in your professional opinion the most successful license regimes on the continent, beside the UK one of course?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

The regulation of online gaming is a hot topic – it sometimes can be interpreted and applied in different ways from country to country and even region to region in larger countries.

I believe it’s really positive that in the last few years, European markets have been more open to our industry. Quite a number of countries have improved their regulations and a number of other countries are currently in the stage of adopting new licensing regimes.

At LeoVegas we have licenses in Malta and UK. Malta was the first European Union member state to introduce a comprehensive legislation on remote gaming in 2004. This has resulted in Malta being regarded by the industry as the most prestigious European Tier-1 jurisdiction for gaming operations.

The regulatory framework in Malta is stable, comprehensive and takes into consideration the protection of both operators and players. Furthermore, albeit being very thorough, the procedure to apply for licensing in Malta is very efficient. The island also offers an English speaking workforce, top notch industry specific services and a stable infrastructure.

EEGReport Magazine: #GoneToVegas, we loved that ad. Has it brought the attention you were looking for? I do believe it was a huge success.

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

I’m glad you loved our ads. The #GoneToVegas campaign has indeed been one of the best ones we’ve had for the UK market. We wanted to show how people are able to have some ‘me time’ away from their daily routine and by using our mobile gaming app they can experience the same fun and excitement of Vegas.

 Building a social marketing campaign around the TV campaign has helped us in attaining an even bigger success than we were expecting. The #GoneToVegas campaign has indeed been shortlisted as one of the best social marketing campaigns of the last 12 months as it’s a finalist in the EGR Operator Marketing & Innovation Awards.

EEGReport Magazine: Looking further afield, where are the major emerging opportunities in Europe for mobile casino operators at the moment?

Johan Styren: LeoVegas came to life just over 4 years ago by Gustaf Hagman and Robin Ramm-Ericson with the objective of creating the most outstanding mobile gaming experience. Today, LeoVegas offers some 700 online games of which almost 500 are available on mobile devices. According to our research, this makes us the online casino operator with the largest selection of games available on mobile in Europe. Another proof of our mobile first approach is that over 60% of our deposits and revenues are generated trough mobile devices.

I already hinted earlier that I think there will finally be some good content and supporting functions where it comes to wearables. Furthermore, in light of the operating landscape at the moment I think that the two trends that mobile gaming operators will be looking at are data and personalization. Both of these will be driven by customer preferences and will see the advent of a new approach for customer interaction.

 Data, or as the common term goes, big data is to a certain extent already being used by various operators but I truly believe that there’s still room for improvement. We all know that customers want services that are personalized around them and their necessities. Therefore, with an improved understanding and application of data we should be able to truly provide our customers with unique, custom mobile experiences.

 

EEGReport-Magazine-Issue3

Vahe Baloulian- EEGaming Interview – (EEGReport – Magazine – Issue3 – June – September 2016)

Published

on

EEGReport Magazine: During 2015 and even in these few months of 2016, legislation in some Eastern European countries has been amended with new regulatory acts. For example, software suppliers need to apply for a second class license, etc. How do you feel this has impacted BetConstruct’s operations?

^2D95D3103B8C03149705DB32AFA3A81D56AEAE9E291B171C13^pimgpsh_fullsize_distrVB: Government regulation is important where the industry can’t, for whatever reason, self-regulate. In those cases we welcome it as it makes things clear and levels the field. Unless regulation deviates from its primary purpose of player protection and turns purely into tax collection, it allows us to better understand the jurisdictions where we are planning to become active. Now that some Eastern European countries are doing what many of their European counterparts have done, we are hoping that they will use the reality of them not being the trailblazers to their advantages and will learn from the sustainable regulating regimes. Although BetConstruct is typically prompted to go into licensing or certification processes by our partners wishing to operate in certain jurisdictions, our legal and compliance specialists are also tasked to keep us ahead of the curve when it comes to the upcoming and changing regulations.

EEGReport Magazine: As we know BetConstruct offers a full range of betting software for physical premises. How big is your impact in the CEE region?

VB: BetConstruct has its roots as a retail sportsbook operator. Therefore, we do have a very strong and ever-evolving sportsbook offering for the land-based operators and are fairly well represented in the region through our partners in the Baltics and Balkans. This does not mean we are completely satisfied with our penetration of the region. For historical reasons, we are very well aware of the diverse mentality and culture of the peoples living in CEE region and this informs our conscientious approach to their demands and requirements. However, it is the constant learning process that drives our efforts to identify and take advantage of the new opportunities there. We recently opened our Kiev office and will continue to insistently seek out new partners in this region.

IEEGReport Magazine: Is the online sphere taking over from gaming in the high street in bookmakers and casinos?

VB: The casinos and bookmakers who have not yet expanded online may harbor an intrinsic fear that online will take over the land-based industry. Still, I don’t think it is happening now and I don’t see it happening in the near future. Players enjoy their freedom of choice. They watch movies online but cinemas are still dotting the landscape, they read digital books though printed ones are still being sold everywhere, they buy digital music yet concert venues are still sold-out. Having said this, the land-based operators, regardless of their participation in the e-gaming space, must evolve to retain their allure. We see, for example, some of our partners moving from the run-of-the-mill shop formats to sports cafés and bars with betting as a major part of the offering. I believe that while it is not a matter of land-based being pushed out by the online, it very well can be a matter of those who cling to conventional, slow progressing modus operandi being pushed out by those who are innovative and swift.

EEGReport Magazine: Since the affiliates of some of these newly regulated countries fall into the same licensing criteria as software suppliers, do you think that this is beneficial to the online gambling affiliate businesses?

VB: By and large no, but it depends on the level of regulations that are applied to the affiliates and how the affiliates are defined. Affiliates are marketers, and as such they have to follow the same conventions that govern marketing trade. Every responsible adult oriented industry, whose products are being advertised to general public, should have a code of conduct. Affiliates should be required to adhere to the same codes of advertising as operators. If their efforts strictly fall within the definition of marketing, I think that regulating them as they do gaming technology providers is excessive. I think that while operators cannot take responsibility for their affiliates’ every action, they should carry out their own due diligence of affiliates before signing them up and continue monitoring affiliate activities during their partnership.

EEGReport Magazine: From the information we have, the Czech Republic is going to open its market to remote operators and it is believed that the first licenses are already going to be available at the beginning of 2017. Has your company received orders or requests from operators that are looking to penetrate the market and use your platform?

VB: Even with expected considerable tax rate increases, the pending adoption of a new gambling regulatory framework in Czechia, which will remove the seat requirement, has wetted appetites of a few operators that have contacted us hoping to upgrade their technology before this market really opens up. Our business development specialists too are actively exploring the new opportunities that 2017 will bring if these changes are enacted as expected. For us, as a technology provider, the constant challenge is to make sure our products comply with the new requirements without making the player’s journey more complicating.

EEGReport Magazine: Recent changes to Bulgaria’s remote gambling laws have made the market increasingly attractive to both foreign and local operators, but how is the competitive landscape shaping up? What is the inside info you have from operators that are using your platform in regards to this market.

VB: Bulgaria showed a more progressive approach to online gaming with sensible fees and taxes and open-minded legislation. Our partners in Bulgaria are EGT and the Bulgarian National Lottery. Both are undisputed leaders in Bulgarian gaming industry. It’s a market with a few big players, many of which are locally owned. These companies have been competing long before the new rules took effect. One of the major differences is that now this competition has moved into a more leveled field and those without licenses are being blocked by the government.

EEGReport Magazine: Do you think that countries such as Romania, Czech Republic, Poland or Hungary are markets for which operators should be queuing up for a license or lobby to be regulated, or does too much uncertainty remain to make it a sustainable investment given the fact that it’s the CEE region?

VB: We are talking about a combined population of about 80 million people. That’s quite a sizable market to be ignored. With Western Europe markets getting saturated and maturing, opening up new markets by having them regulated is very important. For some operators, I would say, it is vital. Removing uncertainty through regulation will help and if we talk about lobbying the efforts should be directed at making these regulations sensible. Regulations are there to first and foremost protect the consumer. If you look at the programs of the most industry conferences, you will notice that we get so overwhelmed with all the rules and requirements that we almost never discuss how we can better serve our players, their issues are never in the center of the agendas.

EEGReport Magazine: What other trends should we look out for? Where do you expect the European market to go?

VB: There is a lot of talk about e-sports, millennials, VR, M&A, etc. Nobody really knows how all these will play out. BetConstruct has been actively covering e-sports before it became a buzzword. With all the talk about them notwithstanding, millennials have still not being figured out. The real utilization and spread of VR in gaming is a few years away and all M&A activity is not really changing the way the industry functions. We can talk about trends, buzzwords and people doing the things media usually gets excited about, while, many companies, often unnoticed and unheralded,  will continue running their casinos, sportsbooks, bingos and lotteries, quietly producing compelling results and serious profits.

Continue Reading

EEGReport-Magazine-Issue3

Interview with Adv. Tal Itzhak Ron and Aviya Arika [Tal Ron, Drihem and Co., Law Firm] – (EEGReport – Magazine – Issue3 – June – September 2016)

Published

on

EEGReport Magazine: How about Germany, which is granting just a certain amount of licenses and modifies this number accordingly every year. A market which has so many potential. In a recent study, if Germany opened its online gambling model to allow every qualified applicant to get a license, only 8 percent of the players would patronize with illegal sites. What’s your opinion on the German market?

Untitled-1666Again, we believe that here is no point denying the dominance of online gambling, and jurisdictions that decide to go with this trend and not against it will be the ones who gain the most. It is always better to regulate something than to ignore it, the aim is to protect consumers and prevent fraud and money laundering. Actually, Germany is one of the first countries that is about to regulate specifically DFS by offering “soft” gaming licenses and this is a very wise and innovative step in our eyes, and we follow this very closely for some of the eSports, DFS and Social Gaming ventures that we advise at our firm.

EEGReport Magazine: In your expert opinion, which countries will be an innovation to the current wave of gambling legislations that is sweeping across Europe?

Sweden is discussing new licensing regimes; however we still believe Malta, Curacao and Isle of Man will maintain their dominance in newly established operations, based on statistics of our offices abroad in the last 12 months.

EEGReport Magazine: In our research to create this interview, we have found many interesting things about you (Tal) and I do believe you are one of our most famous interviewees until now. I’ve read somewhere that in your spare time, you are an active participant in the electronic music scene, and you’ve released a 1980’s-inspired electro clash single recorded with the well-known Israeli music producer, Izhar Ashdot (the producer of Late Israeli singer, Ofra Haza). Let me say, you are not the first Jewish professional I met that is active in such entrepreneurial activities…is this something that is really popular in Tel Aviv?

Well, what you heard is true. Generally, Israel is nicknamed the “Start-up Nation” for a reason. People here are very creative. My firm and I are leading the iGaming and financial technology legal profession for over a decade because we think outside the box, we facilitate things for our clients that would not have been possible elsewhere, we contribute to the most sought after publications, and we attend, lecture and co-chair 25 conferences a year. This way we shall always know what’s hot and what’s not and how to give the necessary “X-factor” for the success of our clients.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Tal Ron, Drihem & Co. Law Firm – the award winning gaming law firm since 2003, boasts a team of 11 lawyers and jurists in Tel Aviv, part of a larger group of privately owned companies consisting of alumni of prestigious universities and global law firms. The group, headed by Advocate and Notary Tal Itzhak Ron, focuses exclusively on Online Gambling law, Ad Tech and Financial Technology, representing the biggest names in these sectors and recommended by all leading platform providers as their first point of contact.

Adv. and Notary Tal Itzhak Ron is a General Member of International Masters of Gaming Law (IMGL), practicing in Hi Tech, Mobile Applications law, Digital Media, i-Gaming and Financial Entertainment law. Tal graduated from Haifa University School of Law (LL.B.) and Faculty of Computer Science (B.Sc.), and while working as a software developer at a publicly traded software company, NESS Technologies group, has further obtained a Master’s Degree in Computer Science from Bar Ilan University (M.Sc). Tal established Tal Ron, Drihem & Co., Law Firm in 2003, focusing on Online Trading, Ad Tech, Hi Tech, M&A, Fin Tech and iGaming, quickly becoming one of the first international law firms practicing solely on these areas, advising top-tier international clients in these fields. Over the years, Tal gained extensive knowledge in Financial and Gaming regulation, International Taxation and Payment services. Today his team of highly seasoned attorneys and partnering professionals headquartered in Tel Aviv and operating from 8 offices around the world, offers an international one-stop shop for all legal, incorporation, banking, M&A and licensing needs.

Offshore and Gaming Specialist Aviya Arika is a seasoned gaming entrepreneur who has been involved in the gaming and binary options industries for years. Through hands-on experience combined with legal and financial academic degrees, Ms. Arika’s areas of work extend from offshore and international finance law to regulated licensing and gaming law, while she has a special interest in lottery, fantasy sports and e-sports. Ms. Arika assists many of the leading operators and affiliates in the gaming, forex and binary options industries. Her contributions to the field can be seen in articles published in leading financial and gaming publications, as well as in lectures and panels she has led in main industry events. Ms. Arika’s past work with the state prosecution has given her a fundamental knowledge in AML and other criminal policies, knowledge that enables her to guide clients on best practice, reputable banking and compliance.

Continue Reading

EEGReport-Magazine-Issue3

Stjepko Čordaš – NSoft and BiH – (EEGReport – Magazine – Issue3 – June – September 2016)

Published

on

EEGReport – Magazine: Since Bosnia and Herzegovina, a Southeastern Europe located on the Balkan Peninsula is included in definitions of Eastern Europe or histories of Eastern Europe, we would like to know more about the developments of the online gambling. What is the current status of the Bosnian market in terms of licenses for online gambling software providers and are you running into difficulties at entering new markets?

^80ED403EC7F0721DA3EF94BD881713DF834CEC10804C1E3F4C^pimgpsh_fullsize_distrStjepko Čordaš: Betting industry in Bosnia and Herzegovina has a somewhat strained relationship with the government. Up to last year (2015) most of the market was unregulated and the government really did not know how to approach the issues. With the current legislation in place, online gambling has been finally legalized, but with severe restrictions. Before going into details, it is important to note that the complex national system is causing fractures in how gambling (in truth, every industry) is being dealt with. First we have Bosnia and Herzegovina, which is a country, where you have the first layer of the government and laws. For example, the VAT law is regulated on the country level. Then you have two entities – Federation of Bosnia and Herzegovina and Republic of Srpska. These two entities, de facto, behave like two separate states. Most, if not all, of the legal framework is separate and these have two separate governments. One of the points where there are differences is the law on betting and gambling. While Republic of Srpska has a governing law covering this matter for a few years now, Federation of Bosnia and Herzegovina just approved their law last year. While both entities laws are somewhat restrictive, one in Republic of Srpska is more open, with cheaper licenses and easier procedures. The licenses are valid only on the territory of one entity, so any operator that wants to cover the entire country has to have two separate companies and two separate licensing. This can cause additional operational expenses, as well as, introduce complexities into how operators run their companies.

When we go back to the recent legal changes in Federation of Bosnia and Herzegovina, as already mentioned, online gambling has been legalized. However, licenses are quite expensive – where the operator company has to have at least 750.000,00 EUR of founding capital, 400.000,00 EUR in guarantees and around 100.000,00 EUR in legal fees for the actual license. Also, there are renewal fees every year. In addition to this, the company has to connect to the central server of the Tax authority and send each and every ticket to the Tax authority in real time. This part of the requirement is especially troubling, since Tax authority servers and software do not have capacity to accept this amount of data in such short time and often their server is basically DDOS-ed by their own requirement.

Furthermore, RNG games are illegal online with the current legislation. Although, the idea was to limit virtual games (for example, this would be NSoft’s Lucky Six or Greyhound Races), the language of the provision makes it seem that all RNG games are illegal online. Which of course makes no sense, since most of the online casino games are RNG based.

Other than this the government introduced fees on players, where for sports betting players have to pay a 5% fee on their bets, and every prize larger than 50 EUR is taxed with a tax rate of 10%. There are plans to introduce the 5% fee for every type of game and to introduce tax rate for any prize.

So, as can be read the current legislature in Bosnia and Herzegovina is swimming against the current of the recent industry developments and at least from my perspective is severely limiting the open market economy in gambling industry. This is why NSoft is mostly focusing on gaining more international clients. A bit more than 60% of our current business is international as of this moment. The target is to have this number to at least to 80% by the end of this year.

EEGReport – Magazine: As we know you were born and raised in Bosnia and Herzegovina and your first touch with the iGaming world started back in 2013 when you took on a Project Manager role at NSoft, a company at which you are currently in the role of CEO. How much has the iGaming industry evolved in the recent 3 years, but especially have you seen significant growth in Eastern and Central Europe recently?

Stjepko Čordaš: Well, this is rather an interesting question – especially since in the last three years the iGaming industry is seeing a new renaissance. Web and web based technologies are finally enabling faster delivery to operators, easier communication with the punters, real time access do data and habits. In this sense, NSoft now has an edge. Since the start of the company some eight years ago, NSoft started all development on pure web technologies. At that point of time this was rather exhausting because other frameworks had already solved many issues and development in them was faster and easier. It didn’t help that most of the clients we had at that point were retail based. So web technologies and retail caused a lot of frustration then. However, now when the operators recognized that you have to be everywhere in order to stay competitive, web technologies are the bridge that enables this. Punters want seamless experience in retail (shop and terminal), online and mobile and the only way you can provide this are web technologies. So, a lot of issues that a lot of the software operators are now facing, have been already solved by NSoft, which can be seen in our Seven platform. Seven platform enables this seamless experience where the operator can control their entire operation from a single interface – be it retail or online environment.

When we look to the markets, Central Europe is a more conservative market with higher barriers to entry – the operators are well established, the punters have clear habits. However, Eastern Europe is just now experiencing the possibilities. One market in particular, Romanian market, is the current ‘gold rush’ setting. Romania has a lot of online infrastructure, there are a lot of people, market is being regulated, there are a lot of operators – which means that there is a lot of opportunities for us.

EEGReport – Magazine: You are a specialist in Secured Transactions Law and European Union Law. What would you change or add to the current frameworks?

Stjepko Čordaš: Unfortunately, I do not have much time to focus on these topics, but I really have to mention that reform of Secured Transactions law is my personal passion. Although, it may seem a bit boring at first – the Secured Transactions law is the one which the economy is really based around and one that enables the economy to function. Without going into legal details, I truly support the way the US has done this through their Uniform Commercial Code Article 9.

Regarding the EU law, I really don’t think anything needs to be added to this framework. For me, it is just fascinating how this supra-national framework is functioning and developing. What is currently lacking is the complete support from the different country members. But this is more of a political issue and I really try avoid to talk about politics. What I can add to this is that betting and gambling industries in the EU can really profit a lot from the principles that are set in the Treaty on the Functioning of European Union and especially on the principles of the free movement of goods, people and services. Some operators have recognized this, but I really believe that it should be used a lot more to push for more open markets.

EEGReport – Magazine: How big is the impact of having gaming software providers being present in Eastern Europe? Do operators feel “at home” by knowing they are entering markets where certain iGaming software providers have offices?

Stjepko Čordaš: Actually, at first operators are more distrustful to software providers from the Eastern Europe. It is probably in our culture to be like this, and this can be seen even on the punter side. For example, when we tried pushing localized versions of some of our products to our clients, the players would simply stop playing. Their notion was: “OK, this is local, it probably is not good at all.” And this extends further than gambling.

However, when we manage to overcome this first distrust, every client is amazed on what we have and what we have built. The real selling point for our product is when we manage to bring the client directly to our headquarters in Mostar. When they actually see a company with 150 young and motivated people, in a middle of ‘war-ravaged’ Bosnia and Herzegovina, everyone wants to use all of our products. In the last two years, this distrust is disappearing, since NSoft already has an established reputation in the market.

EEGReport – Magazine: As we know, the success story of NSoft is not something that happened by chance. A combination of great products, great people, and great culture played a key role in your growth. What are the future plans for the company?

Stjepko Čordaš: As already mentioned, one major goal is to export more services. The target is to get to 80% of exported services by the end of this fiscal year. Also, I can get into details on how we plan to grow 50% in revenues, expand to this and that market, but I will focus on something different.

The major goal for NSoft is to create 1000 workplaces. And this is how we measure our success. The key ingredients in the NSoft success story are our employees and our culture. We are trying to create opportunities in a country where youth unemployment is more than 50%.  Working at NSoft is a privilege for every team member and we treat each other like family. I know it will be hard to translate this to an organization of 1000 people, but this is our goal and the most important plan for the future.

In order to facilitate our plan, we have started a start-up incubator and a programming school. The school is of major important to our goals, since it can fuel the knowledge required to have more quality employees. The school is completely free of charge and anyone can attend. The school already has around 300 active students and the incubator has 15 start-ups.

I could write essays on how we try to create and do things differently, but really, the only true way to experience this is to visit us at our Mostar headquarters. It is a bit hard to get to, but once you are there, you can understand the things I’m trying to write about. So, I am extending an open invitation to anyone who wants to come and see how we do things.

EEGReport – Magazine: Do you see an opportunity for young software developers, which are at a rather high number in Eastern Europe, to start new companies and maybe innovate the already known platforms?

Stjepko Čordaš: Yes, and yes. As already mentioned, we are trying to create this culture since there are a lot of opportunities for software developers and not just in gambling industry. For example, a few years back, the European Union declared that Eastern Europe is a strategic goal for the outsourcing of software development services. Why? Well, there are developers that are of reasonable quality, the mindset is similar to the rest of the Europe and the prices are cheaper. My personal belief is that we (Eastern Europe) should use this goal best to our abilities, but also shift this from simple outsourcing services to developing full-fledged products, as NSoft does.

EEGReport – Magazine: In your opinion, which are the most popular ways of online gambling in the Eastern and Central European region? Casino, sport betting, online poker, virtual games or maybe bingo?

Stjepko Čordaš: Traditionally, the most popular ways of online in the Eastern and Central European region is sports betting. However, if we move more to the Eastern part, online is just becoming a real trend and most of the business was focused on the retails sports betting and virtual games. From our business, I can say that countries like Bosnia and Herzegovina, Serbia, Montenegro and Romania are really crazy about virtual and bingo games. These types of games are generating most of the revenues on some markets and some operators could not function without these.

EEGReport – Magazine: Looking further afield, where are the major emerging opportunities in Eastern Europe and the Balkans for operators at this moment?

Stjepko Čordaš: If we are looking in the future, online and sports betting is really the opportunity for this market. As more connectivity is introduced, more punters are becoming aware of the different approaches and more opportunities the operators have to innovate. For example, UK is a classic well established market where in order to sell your product you have to have a product which punters already know. However, in the Eastern Europe and in the Balkans, operators can innovate a lot, since punters want everything but did not experience it before. So, in the next few years we can expect a lot of rise in the online segment in these markets with a lot of innovation and turnover being tossed around.

 

 

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

– Born on June 1, 1987 in Metković

– Attended primary and secondary school in Mostar

– Undergraduate degree in Service Management from RIT Croatia, Croatia

– Graduate degree in Law and Economics from CEU, Hungary

– Passion for technology and innovation which pushed me to NSoft

 

cordas.stjepko@nsoft.ba

www.nsoft.com

Continue Reading

Industry News

  • Live Event/Conference
  • Press Releases
  • Latest News
  • Gambling in the USA
  • European Commission

Budapest – 16 August 2018 – The industry portals are full of news about the gambling industry in the [...]

Budapest – 15 August 2018 – We are excited to announce a new type of sponsor for the third edition o [...]

Ljubljana – 15 August 2018 – Although Malta is recently in the headlines for becoming “The Jurisdict [...]

Transylvania – 14 August 2018 – We excited to announce a strategic media partnership with SBC (Sport [...]

Ljubljana – 13 August 2018 – Starting with 2012, the year in which Serbia received associate members [...]

TULSA, Okla., Aug. 17, 2018 – Casino Cash Trac (CCT) is excited to announce that once again it has b [...]

Friday, August 17; 2018, Malta – Slots pioneer Wazdan has inked a deal with GoWild Gaming to provide [...]

HARRISBURG, Pa., Aug. 17, 2018 – The Pennsylvania Gaming Control Board today posted on its web site [...]

VALETTA, Malta, Aug. 17, 2018 — Kindred Group has entered into an agreement with Hard Rock Hotel [...]

BetConstruct has a major gaming event in the European region ahead, the Entertainment Arena Expo in [...]

Andorra’s tender process and the resultant decision to award its sole casino license to a small loca [...]

Hong Kong police has detained 48 persons, including gamblers and sex workers, following a three-mont [...]

New Jersey has reported impressive betting revenues in July, with two new casinos in Atlantic City, [...]

OHL Desarrollos, the leading construction company in Spain, has acquired a 32.5 per cent stake in th [...]

Artificial intelligence, 8k projection and virtual reality are among the attractions planned for an [...]

TULSA, Okla., Aug. 17, 2018 – Casino Cash Trac (CCT) is excited to announce that once again it has b [...]

HARRISBURG, Pa., Aug. 17, 2018 – The Pennsylvania Gaming Control Board today posted on its web site [...]

VALETTA, Malta, Aug. 17, 2018 — Kindred Group has entered into an agreement with Hard Rock Hotel [...]

HARRISBURG, Pa., Aug, 2018 — The Pennsylvania Gaming Control Board approved fines totaling $160,000 [...]

New Jersey has reported impressive betting revenues in July, with two new casinos in Atlantic City, [...]

Brussels, 19 June 2018 – Digital Single Market: EU negotiators reach a political agreement on free f [...]

LONDON, June 18, 2018 — Codewise, the industry’s first provider of AI-powered online ad measurement [...]

Brussels, 6 June 2018 – The European Parliament and the Council reached late last night a political [...]

Brussels, 18 May 2018 — Today the European Commission is publishing the results of the 2018 Digital [...]

Tre

%d bloggers like this: